Impact of commercial competitions on the development of skills in cryptocurrency
The world of cryptocurrency trading has registered a significant increase and a rapid adoption in the last decade. As more people join the market, competition for profit has become more and more fierce. A strategy that has gained popularity among traders is participating in online competitions, where participants compete to achieve specific goals or rewards. While these events have been appreciated as a way to improve skills and develop confidence in trading, their impact on skills development is a topic of the current debate.
What are commercial competitions?
Trading competitions usually involve a series of challenges or tasks designed to test the traders’ skills, knowledge and strategies. They may include:
- Market analysis : Participants are offered a set of data on the stock market and have to make predictions about future price movements.
- Risk management : Traders are asked to demonstrate their ability to manage the risk effectively in different market scenarios.
- Implementation of the trading strategy : The competitors are presented with hypothetical trading scenarios and must apply their knowledge about the strategies to achieve the specific objectives.
Impact on skills development
While commercial competitions can be a valuable way to learn and improve skills, research suggests that their impact on skills may not be as significant as expected. Studies have shown that participants tend to develop similar skills in commercial competitions compared to those trading without these events (1). This is because many of the key skills needed for successful trading, such as market analysis, risk management and strategy implementation, are already well established.
Limitations of commercial competitions
However, there are several limitations to consider:
1
- Lack of diversity : The same participants can dominate the competition, and the new participants cannot have the opportunity to gain experience through these events.
- Surveillance on winning
: Competitions can create an environment in which traders focus too much on winning, which causes them to neglect other important aspects of trading, such as risk management and market analysis.
Examples from the real world
Despite these limitations, many professional traders and market analysts have found value in participating in online competitions:
- World Poker series (WSOP)
: WSOP is one of the most popular poker tournaments, with a large and dedicated tracking.
- The cryptocurrency trading championship : This event, led by Bitmex, brings together the top traders to compete for prizes and recognition.
Conclusion
While commercial competitions can be a valuable way to learn and improve skills in cryptocurrency trading, their impact on skills development is limited. In order to truly develop the necessary skills, participants need access to high quality, mentoring and practical experience. Online platforms and community forums have made it easier for individuals to connect with others who share similar interests and goals.
As the cryptocurrency market continues to evolve, it is essential for traders to recognize both the benefits and the limitations of trading competitions. Understanding these dynamics and taking a more nuanced approach to the development of skills, traders can make knowledge of the case about the events in which to participate and how to allocate their time and resources.
References:
(1) “The impact of online poker tournaments on poker formation” by C. R. W. (2017). Journal of Gaming & Virtual Worlds, 8 (2), 131-141.
(2) “Competitions as a factor in developing skills in cryptocurrency trading” by J. E. M. (2020).